1. Field of the Invention
This invention relates to the field of Information and Communications providing a novel system and methods for a secure, multi-channel, multi-merchant, multi-card payment platform, which includes a novel remote public terminal available to the purchasing party.
The purpose of this invention is to provide a system and methods for the use of a telecommunication platform enabling payment transactions between enrolled merchants and registered or unregistered users, using a remote public terminal or other enabled channel-devices. Payment transactions are processed as real time, direct bank payments which are carried through one or more financial institutions and are not intended to be a virtual exchange of monetary values between the interested parties.
Nowadays, a merchant that wants to sell merchandise to its customers needs to acquire the customer's payment information regardless if the sale is carried out via the web, in a shop or using a telephone order. Furthermore, the merchant must have a complete billing and payments information system in order to process and manage the customer's data and interact properly with all involved financial institutions such as banks, credit card companies, . . . etc. This implies managing a payment information system and a telecommunications connection for each method of payment that also needs to be integrated with the accounting system and consolidated at corporate level.
This causes useless multiplication of identical information, systems and processes for all merchants, generating security issues, a limitation of selling channels, a limited number of payment methods, using, for example, a credit card either directly managed or interfaced with a dedicated payment system such as “PayPal”, “Cyber Cash”, . . . etc.
Previous attempts to allow payment methods using electronic devices have generated a number of solutions that are not widely used because of their proprietary implementation features that are working only for a limited number of users.
Other solutions to allow payments using other electronic devices, like, for example, using a Pay TV requiring credit card data supplied using the remote control, have failed because of security issues and the inability to verify the credit card validity in real-time. The same issue arises on any electronic device not specifically designed to carry out a secured payment transaction.
The solution to these current problems is achieved by this invention by remotely placing the payment function on a dedicated payment device, capable of validating the payment instrument and performing real time payment transactions.
The novel remote payment device available to the purchasing party is used like a remote control which instructs the payment server to execute the desired payment transaction without the need of entering any sensible data related to the chosen method of payment. This invention, while resolving all security issues related to the disclosure to the merchants of payment data, allows the use of not only any type of credit card, but also any other electronic payment methods such as a debit cards, pre-paid cards, and revolving cards. This invention comprises a system that overcomes the mentioned limitations, and, at the same time, extends the payment capability to a larger number of users by allowing them to execute payments using electronic devices that were not available before. This invention doesn't require any electronic device modification, either new hardware or software, or user training, allowing an immediate utilization of the platform by everybody.
The term “Multi-channel” means the possibility of receiving payment orders from a variety of remote electronic devices, such as, dedicated public remote terminals, smart phones, touch-tone telephones, interactive digital televisions, biometric readers, . . . etc.
The term “Multi-merchant” means that the payment platform is an open architecture hosting an unlimited number of merchants, and it is not limited to one single marketplace, like the World Wide Web, but it is a payment infrastructure enabling electronic payments for multiple marketplaces.
In information technology, the term “Platform” describes a hardware architecture and a software framework, including application frameworks allowing the software to be executed. Typical platforms include a computer's architecture, an operating system, programming languages and related runtime libraries or graphical user interfaces.
The term “Multi-card” means that the platform has no limitation in accepting payment cards of any kind, including credit cards, debit cards, revolving cards, prepaid cards etc whereas in other environments (e.g. websites) accepted payment cards are limited to credit cards or some other mechanism which still requires entering sensitive information.
The term “secure” means that payment sensitive data are never exchanged in the payment process to avoid “phishing” and card “cloning”. Card cloning is the creation of an identical copy of a payment card after card data have been illegally acquired. In computing, “phishing” is an attempt to fraudulently lure users to enter at a website sensitive and personal information, such as credit card data, social security numbers or bank account numbers by disguising the requests of such sensitive information as trustworthy, legitimate requests, when in fact the purpose of capturing those information is for illegal use.
2. Brief Description of the Prior Art
Numerous patents have been granted to automated, computerized payment methods. U.S. Pat. No. 7,089,208 “System and method for electronically exchanging value among distributed users” by Levchin et al, assigned to the popular PayPal, Inc., is an example of a method to pay online purchases using a computerized system allowing payments using web-enabled devices. However, the similarity of the payment method disclosed by this invention is limited to the presence of registered users and to the capability they have to complete the payment order using a remote terminal. A further reading of the patent reveals the core functioning of the “PayPal” system, although still being “online”, it is not in “real time”. The PayPal system provides the association of an electronic account to each registered user, without any distinction between the buyer or the seller. Whoever is registered to the system is allowed to pay or being paid via an electronic account, which is fed by the user using a credit card. The sale transactions and the relative debit/credit transactions are managed using electronic accounts, by moving the transaction amounts between accounts. In case of an insufficient fund situation on a buyer account, PayPal is authorized to debit the buyer's credit card to balance the account. PayPal is then actually acting as a financial institution, able to issue electronic currency. By subscribing to the service, the user accepts to purchase and redeem from PayPal the electronic currency needed to carry out or receive payments to/from other users. By executing the financial transaction, PayPal attempts to convert the electronic currency into “real” currency within five working days from the transaction.
From the financial point of view, PayPal is then the only one “merchant”, being PayPal the manager of the currency accounts and to credit, when requested, the balance to “real” bank accounts using banking wire transfers. The PayPal user can request the reimbursement of the entire or partial balance of the electronic account by supplying bank account information. The reimbursement is also subject to fees and it can take five working days or more, depending on various circumstances, without the assurance about the actual time needed to complete the processing of the transaction, as the system is not conceived to operate in “real time”. From a technical point of view, the use of PayPal requires “clients” terminals on which the dedicated software is installed, which allows the connectivity with various PayPal servers to execute payments.
A PayPal user needs to have a personal computer and needs to be sufficiently capable to install and use the client software and enter the appropriate commands . . . etc. The PayPal client software allows the monitoring of the user's electronic account, and executed transactions. The PayPal system is then strongly connected to its “front-end” system which needs to be used by every user.
In conclusion, the PayPal system is a proprietary payment system based on issuing electronic currency and on the exchange of monetary amounts between the accounts of the participating users. The other participants (buyers and sellers) are users that feed the virtual accounts, make the debit/credit exchanges with other users and periodically can request a real currency refund with related wire transfer transaction to their real bank accounts.
This inventive system, instead, is an open payment system, multi-users, integrated system using the standards of the POS (Point of Sale) transactions, and operating in real time using the inter-banking network. This method does not generate: debit/credit accounting situations, nor a need for balancing, nor a need for feeding accounts, nor requests for reimbursements.
In the platform disclosed by the present invention, there are no user's accounts, either for buyers or for sellers. The payment transactions (debit/credit) are not carried out in electronic currency and do not cause the transfer between accounts, but generate real time POS (Point Of Sale) transactions on the real inter-banking network. This does not create situations of balance reimbursements or the need for “feeding” electronic accounts. In the present invention, debit and credit transactions are executed in real time, affecting directly the parties involved. The system is actually a multi-users gateway payment system and does not present use limitations either regarding the transaction amounts or debit/credit transaction time. From a technical point of view, the system of the present invention accepts payment requests in a standard form from many “channel devices”. These channel devices are not parts of the system, being “Front End” systems managed directly by the merchants (e.g. a system gathering orders using digital TV).
Since the actual execution of the credit/debit transactions are standard POS transactions, written statements regarding the confirmation of the transactions are automatically included on the account statements generated by external financial institutions. Therefore, it is not necessary for a user of the new system to monitor the accounting situation. The system according to the invention is a gateway payment system, multi-merchant, independent from all communication channels, and therefore not limited to the on-line environment. The system processes payment transaction POS in real time and it is totally different from trading electronic currency. The payment amounts are directly credited to the merchant accounts in real time, without the intervention of intermediate financial institutions. The system is free from limitations due to outstanding balances between users.
U.S. Pat. No. 5,329,589 “Mediation of Transactions by a Communication System” of Fraser et al., assigned to AT&T, teaches a system that is different in both the concept and in the method of use, when compared to this invention. First of all, being the patent granted in 1994, it describes a telephone technology based on central switchboards and “pulse” telephones. The disclosed novelty is in fact a mediation system between a buyer and a seller using an electronic communication system between the two parties. The scope of the system is to connect the two parties, collect the information from the buyer, collect the information from the seller, store them and execute a transaction, and communicate the outcome to the buyer and the seller. In this way, this mediation system can hide from each party the sensitive in formation of the other party.
When compared to this invention, it is evident that the present invention uses a remote gateway system, that when it receives a payment request which actually contains only the amount, it is able to retrieve from the database, all other needed data related to the seller and to the buyer and it is not functioning as a mediator between the two parties. According to the Fraser's patent, the payment data are instead entered into the system at the purchasing time and the purchase amount is supplied to the system by the seller. The transaction is completed when there is an “agreement” between the two parties, agreement reached electronically by the mediation system (see U.S. Pat. No. 5,329,589 description in col. 80 line 30, col. 8, line 40 and col. 8 line 55; and the descriptions of column 12, line 40, col. 12, line 45 and col. 12 line 60. After gathering all required data, the system, as described by Fraser, executes the payment transaction and communicates to both parties the transaction's outcome, according to the mediator's functionality.
According to the present invention, the payment data are never supplied to the system during the “purchasing” phase, and the transaction data are supplied to the system by the seller, and not from the buyer, after the seller has received the payment request from a buyer via a “channel device” such as a remote public terminal, interactive TV, cellular phone, landline telephone . . . etc. Still according to the present invention, there is no need of electronically gathering the purchase agreement between the two parties, before the payment transaction is carried out, as it is required, instead, by the system illustrated by Fraser et al. and by the Levchin et al. patent. Clearly, according to the present invention, the system does not behave as a mediator, but simply as a “payment gateway”, remotely instructed using different type of terminals on which the payment data are never entered.
A payment gateway, as known to the experts in the field, is an e-commerce application service provider that authorizes payments for e-businesses, online retailers, “bricks and clicks”, or traditional “brick and mortar”. It is the equivalent of a physical point of sale terminal located in most retail outlets. Payment gateways encrypt sensitive information, such as credit card numbers, to ensure that information passes securely between involved parties.
The similarities between the system of the present invention and the systems described by Fraser et al. and by Levchin et al. (assigned to PayPal), are limited to the fact that the seller does not know the buyer's payment data and that there is obviously the presence of an electronic communication system, but both the process and the architecture implementation are completely different. In the system of the present invention, a central database is storing the buyers' and sellers' payment data, previously authorized to be loaded on the platform, thus avoiding the need from the part of the buyer to disclose a second time his/her payment data.
Before describing in details the present invention, it is necessary to supply general information regarding the current state-of-the-art of various payment devices used by electronic payment systems.
Today, there is a clear separation between dedicated “payment devices” such as EFTPOS (Electronic Funds Transfer Point of Sale), and “web devices” such as personal computers, PDAs . . . , etc. EFTPOS is extremely popular in the United States, the United Kingdom, Germany, Australia, New Zealand, and Canada. EFTPOS refers to the technology that allows a merchant retailer to directly debit a customer's bank account by using a debit or a credit card. The payment card, generally, is the same as an ATM debit card swiped through a reading device. Using EFTPOS, the money is wired directly to the merchant retailer's bank account, thus eliminating the liability of accepting actual cash, but EFTPOS is a solution that can only be used to make a payment transaction for a specific merchant retailer, in a specific shop location, where the EFTPOS is located. Current e-commerce implementations can be found on the web, where a number of different solutions have been put in place to get the customer's method of payment. Some solutions go through an interactive process by which the buyer, each time makes a purchase, has to manually insert payment data (e.g. credit card number) and other related info such as name, shipping address, and other personal information. This means releasing buyer's sensitive data, which in many cases, create important security and privacy issues, as known.
Because of their limited features, EFTPOS, PayPal and other current payment solutions show great limitations and are not applicable for payments in other marketplaces such as TV shopping, telephone orders, and mobile payments.
TV shopping today is mainly represented by advertising products on a broadcasted TV channel, usually accompanied by a presenter explaining the sale item's features, price and available discounts. When a person desires to buy an item, he/she needs to call directly the advertising company, usually by calling a toll-free number and ordering to an operator. The buyer is then asked to provide by telephone, a credit card number along with other information such as name, address, card expiration date and so on, or to choose otherwise another method of payment (e.g. cash on delivery). This process needs to be repeated every time the same buyer wants to buy something advertised on TV.
Interactive television is a major breakthrough and will become more and more a trusted tool available to millions of television viewers. We can only refer to “interactive television” as long as there is a communication “return path” from the TV to the broadcaster. This “return path” or “back channel” can be represented by telephone lines, mobile SMS (text messages), radio, and digital subscriber lines (ADSL), or cable. Cable TV viewers receive their programs via a cable, and, in the integrated cable return path enabled platforms, they use the same cable as a return path. For satellite TV viewers, return information to the broadcaster are sent via their regular telephone lines. An Internet connection via ADSL, or other data communications technology, is also being increasingly used. Some devices are now dedicated to display video only from the IP channel, which has given birth to IPTV (Internet Protocol Television). The birth of the “broadband return path” has given new interest to Interactive TV, because it provides interactivity with Video-on-Demand servers, advertisers, web site operators and potentially with a payment gateway. To allow payments using the TV set, the only solution is to join the ITV capabilities with those of an external multi-channel payment platform. Furthermore, this new payment platform gives the TV broadcaster the opportunity to implement and run a full-functioning “interactive marketplace” not limited to its own services, but also capable of selling goods and services of other companies. The TV broadcaster then becomes a “broker” by which other companies can sell services to their customers similarly to what is today possible on the WEB. Everything is done within the platform, connected to the broadcaster application server and to the banking system. Therefore, the platform of the present invention allows for an interactive full TV-commerce marketplace offering to all companies the opportunity not only to advertise on TV, but also to directly selling goods and services on TV without worrying of how to get the payments.
Regarding payments using touch-tone telephones, the Dual-Tone Multi-Frequency (DTMF) is used for telephone signalling over the line in the voice-frequency band to the call switching center. The version of DTMF used for telephone touch-tone dialling is known by the trademarked term “Touch-Tone”, and is standardized by ITU-T Recommendation Q.23. In the time preceding the development of DTMF, telephone systems employed a system commonly referred to as “pulse” (Dial Pulse or DP in the U.S.). Dual Tone Multi-Frequency or DTMF is a method for instructing a telephone switching system of the telephone number to be dialled, or to issue commands to switching systems or related telephony equipment. The engineers had envisioned telephones being used to access computers, because by using DTMF it is possible to operate a telephone via a computer interconnection. However, it is still impossible to use a touch-tone telephone to make a payment because complete payment data need to be entered using a keyboard, not a DMTF keypad.
The DTMF keypad is laid out in a 4×4 matrix, with each row representing a low frequency, and each column representing a high frequency. Pressing a single key (such as ‘1’) will send a sinusoidal tone of the two frequencies (697 and 1,209 hertz). The multiple tones are the reason for calling the system multi-frequency. These tones are then decoded by the switching center to determine which key was pressed (numbers 0-9, #, *, A, B, C, D). Because of these limitations, touch-tone telephones cannot be used to complete a payment process which can require entering the customer name, or address, or any other relevant information. This invention offers the possibility of paying using a touch-tone telephone because payment data are not managed by the merchant anymore, but are stored in the platform's central database. In this way, the touch-tone telephone in the hands of the user becomes a “remote control” by which it is possible to call the system and authorize the platform to pay, from home or from any other enabled telephone line, by simply pressing the telephone keys.
The range of possible applications of this invention is quite extensive, like TV shopping (for those users not owning an interactive TV set), or other shopping opportunities by different advertising sources, like for example, newspapers, magazines, wall advertisement, . . . etc. Using the present invention, it is also possible to pay bills, make donations, buy tickets and any other kind of purchasing as long as it is known the merchant and the code of the item to be purchased.
Another possible application of this invention, are payments using mobile telephones. The mobile telephone, also called cellular phone, cell phone or handset, is a long-range, portable electronic device used for mobile communication that uses a network of specialized base stations known as cell sites. In addition to the standard voice function of a telephone, current mobile phones may support many additional services such as SMS for text messaging, email, packet switching to access the Internet, and MMS for sending and receiving photos and video. Consumer applications that include the largest categories of mobile services such as music, picture downloads, video gaming, adult entertainment, gambling, video/TV are on the rise. The cost of these services is usually billed by the telephone operator for mobile subscribers or it is deducted from the mobile telephone “traffic credits” for rechargeable accounts.
Wireless Application Protocol (WAP) is an open international standard for applications that use wireless communication. Its major application is to enable access to the Internet from a mobile phone or PDA. A WAP browser provides all of the basic services of a computer-based web browser but it is simplified to operate using the smaller view screen of a mobile phone. Mobile Web refers to the World Wide Web and it is accessed from mobile devices such as cellular phones, PDAs, and other portable devices connected to a public network. Mobile web access today still suffers from interoperability and usability problems. This is partly due to the small physical size of the screens of mobile devices and partly due to the incompatibility of many mobile devices with not only computer operating systems, but also with the format of the WEB pages as normally displayed using the Internet. It is a fact that today's mobile phones still lack the possibility of being used as general payment devices because of the absence of a standardized, easy-accessible payment platform. The “accessible payment platform” of the present invention provides the possibility to securely pay any kind of payment (e.g. a taxi fare, a parking ticket . . . etc.) using the mobile phone, without the need of entering payment data, without deducting the cost from the mobile phone “traffic credits”, without bounds to any telecommunication operator and ideally working with any generation of cell phone as long as it is capable of simple text messaging (SMS) or has access to other communication layers such as the WAP (3G phones) or mobile WEB (Smart Phones). Third generation telephones (3G) is the third generation of mobile phone standards and technology, superseding 2G. It is based on the International Telecommunication Union (ITU) family of standards under the International Mobile Telecommunications programme, IMT-2000. Thus, to expand payment capability on new marketplaces and on new payment devices (Interactive TV, Touch-tone telephones, Mobile phones and others) what is needed is a system and methods that overcome today's limitations, allowing secure direct wiring payment transactions to the merchants, without the need of setting virtual money accounts.